Question

# Consider the following two mutually exclusive projects: The required return on these investments is 10

percent.

Cash Flow A

0,-420000

1,46500

2,59500

3,76500

4,535000

Cash flow B

0,-37500

1,19900

2,13800

3,16100

4,12900

**a.**What is the payback period for each project?

**b.**What is the NPV for each project?

**c.**What is the IRR for each project?

**d.**What is the profitability index for each project?

**e.**Based on your answers in (a) through (d), which project will you finally choose?

Doak Corp. is evaluating a project with the following cash flows:

Year Cash Flow

0 -$15,300

1 6,400

2 7,600

3 7,200

4 6,000

5 -3,400

The company uses an interest rate of 9 percent on all of its projects. Calculate the MIRR of the project using all three methods.

Discount approch=

reinvestment approch=

combination approch=

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